Plaintiff AGL Industries, Inc. (AGL), a steel fabrication and erection business, enrolled in a workers’ compensation insurance policy with Defendant Continental Indemnity Company and a reinsurance participation agreement (RPA) with Defendant Applied Underwriters Captive Risk Assurance Company, Inc. After Continental canceled the workers’ compensation insurance policy, AGL sued in New York for breach of contract and related claims and obtained emergency injunctive relief. Defendants then removed the case to federal court, which then granted a motion by Defendants to transfer venue to Nebraska based on the RPA’s forum selection and choice of law clauses. The federal court rejected AGL’s argument that the RPA was void ab initio because it was “an illegal workers’ compensation policy” in violation of New York insurance law. The court found that AGL did not assert that the forum selection clause was the result of fraud or misrepresentation, and therefore, at worst, the clause was severable from the RPA. Moreover, the Court found unpersuasive AGL’s sole argument against enforcing the forum selection clause that transferring the action to Nebraska would violate New York’s public policy in favor of “granting insureds access to the courts of the State of New York for all disputes regarding policies written in and for residents of the State [of New York].” AGL Industries Inc. v. Continental Indemnity Co., Case No. 17-4179 (USDC E.D.N.Y. July 18, 2018).
This post written by Gail Jankowski.
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